CRONY CAPITALISM AND THE GOP FAULT LINE

A GOP willing to battle crony capitalism can remain the party of choice for pro-business conservatives. Republicans will still be the party willing to protect business from over-regulation, high taxes, etc.

The two factions agree on much, but they part company when it comes to their attitude towards corporations. Most steadfast conservatives say too much power is concentrated in the hands of a few large companies, and they are evenly split as to whether the economic system unfairly favors the powerful. Meanwhile, only about one-third of business conservatives say big corporations have too much power, and by a 2-to-1 margin they say the economic system is fair to most people.

I downplayed the policy ramifications of this divergence. Given their mutual distrust of government, I suggested, neither faction is likely to push for a large-scale increase in the regulation of large companies or for government-mandated redistribution of income.

However, I don’t want to leave the impression that policy tensions do not exist. The major tension centers on issues related to “crony capitalism.” While distrust of large corporations does not lead staunch conservatives to favor increased regulation, it does cause them to react bitterly against government efforts to bestow special privileges on businesses. By contrast, business conservatives typically are not bothered by such arrangements, and often support them.

Right now, for example, the GOP is split over Export-Import Bank. This agency provides tens of billions of dollars in financing every year to help foreign buyers purchase U.S. goods. Beneficiaries have included Enron, Solyndra, and Hollywood studios.